Investing.com — Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week.
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Southern Co .
What happened? On Monday, Mizuho downgraded Southern Company (NYSE:) to Neutral with a $90 price target.
*TLDR: Mizuho sees limited catalysts for further outperformance despite a 21% P/E premium. Strong load growth and robust capital plan should support SO’s 5-7% EPS growth rate and maintain a strong balance sheet through 2026.
What’s the full story? Mizuho downgraded Southern Company to Neutral, after previously upgrading it in April 2023 when shares were trading at a 4% P/E premium to the group. The firm initially argued that shares could re-rate to a double-digit premium as Vogtle Unit 4 neared completion. However, with shares now trading at a 21% P/E premium to the electric utility group, Mizuho sees few catalysts for further outperformance.
Despite moving to the sidelines on SO, Mizuho believes that strong load growth in SO’s service territory, driven by data center demand and reshoring of manufacturing, should make the company’s 5-7% EPS growth rate more durable. The firm also believes that management can maintain a robust capital plan, a strong balance sheet with 17% FFO/Debt, and minimal equity needs of $350 million per year through 2026.
Neutral at Mizuho means “The stock’s total return is expected to perform in line with the unweighted, expected total return of the analyst’s industry coverage universe over the next 12 months. “
Shopify
What happened? On Tuesday, Redburn-Atlantic upgraded Shopify (NYSE:) to Buy with a $99 price target
*TLDR: Redburn-Atlantic highlights Shopify’s innovation, social media integrations, and Shop Pay as key growth factors. The firm is forecasting 29% revenue CAGR and 40% EBIT margin by 2026.
What’s the full story? Redburn-Atlantic highlights Shopify’s industry-leading innovation, social media integrations, user-friendly platform, and unique Shop Pay button functionality as key factors positioning it to capitalize on structural growth. The firm’s extensive ecosystem and platform capabilities have cemented Shopify as the ecommerce provider of choice for merchants of all sizes, with significant enterprise merchant wins anticipated in 2025.
Redburn-Atlantic upgrades its recommendation on Shopify to Buy, citing the company’s multi-faceted moat characterized by scale, high switching costs, and an impenetrable three-sided network. The firm forecasts a 29% net revenue CAGR from 2023-26 and a 40% EBIT margin by 2026, resulting in projections 24% above 2026 EBIT consensus. The price target is set at $99, based on above-consensus earnings and a fair multiple in line with peers in the internet, fintech, and software sectors.
Buy at Redburn-Atlantic means “Redburn Atlantic argues that the stock price will rise by at least 15% over one year. For high beta stocks the…
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